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14 June 2018

Henry Faure Walker: We Have to Address the Imbalance in the Advertising Ecosystem

Newsquest CEO and NMA vice chairman, Henry Faure Walker, has called for the levelling of the digital advertising playing field and highlighted the effectiveness of local newspapers' audience reach in a recent interview.

Speaking in a wide-ranging MediaMasters podcast last week, Mr Faure Walker said: “Pretty much all of our local news brands will have significant followings on Facebook, on the Facebook news feed, and actually some of our titles get 30-35 per cent of their traffic from Facebook. But it is a poor environment for us in terms of monetising that, and we only really get value when the user clicks out of Facebook and comes through to our site and then we can serve them advertising at higher yields than Facebook affords.

“So it is a problem, and one of the broader issues that the news industry is concerned about is the unequal playing field that we have in terms of the financial reward that we get for the fact that much of our content fuels social media, and in particular Facebook, but also Google and the wider internet experience. And actually there’s been some work done on this as a research study, which is often referred to by the NMA, that indicated that over 40 per cent of engagements on Facebook in the UK were actually content provided by professional news publishers.

“So you have this unequal situation where Facebook is building its own audiences, its own engagement off the back of news journalism, in my case local news journalism, arguably freeriding the huge investment that we put into local journalism, and we’re getting pennies trickled down in return, whereas Facebook is obviously making huge sums out of that.”

Mr Faure Walker welcomed the Cairncross Review into the sustainability of newspaper journalism in the UK, which has a focus on local media. He said: “it’s great to hear and see that at the highest level government is taking this issue seriously. Because I think if we’re serious about sustaining the model for quality newspaper journalism, whether that’s at the local level or even at the national level, we have to do something to address the imbalance in the advertising ecosystem.”

Demonstrating Newsquest's local advertising proposition in comparison to Facebook, he said: “In York, we reach almost 75 per cent of the adults every month via website alone – that’s before you even add in the additional audience we deliver through print. So if you’re a local retailer and you're wanting to reach people and promote offers and services, then the York Press is a pretty obvious place for you to advertise. In fact, what people don’t know is that Facebook’s reach is significantly less than local news brands now in the UK. So Facebook much vaunted audience is about 50 per cent penetration, so they say that they reach about 50 per cent of the adults in the UK. Well, if you compare that to my example of the York Press (75 per cent), then you can see that we significantly out- club even the likes of Facebook when it comes to reaching local audiences. And that’s why we’ve got a strong digital advertising proposition.”

He continued: “There is a job for us still to be done in getting people to better appreciate the local good causes that we champion, the local corruption that we expose, the local fundraising initiatives that we embrace, and we do that day in, day out. And the fact that it’s independent means that local people can trust our media.” 

Mr Faure Walker discussed Newsquest's launches and how groups with scale can ensure that newspapers continue to operate in areas such as Oldham, where three weeks after the Oldham Evening Chroncile closed Newsquest launched and re-employed some of the journalists. He said: "I think it’s difficult if you don’t have the scale of Newsquest, and obviously they don’t have that, but they did have 50 staff in a small local paper in Oldham, and I think by any account that is a lot of staff to have, and you’re unlikely to be able to generate the revenues to be able to sustain those staff. So we would run a more efficient model. The advantage would be that we would be able to carry on publishing in Oldham."

Mr Faure Walker concluded that: "we’ve done a lot of work reducing production functions in editorial, and we do that so that we can carry on investing in local front line reporting." Newsquest was innovating and growing its revenue base to produce "a sustainable portfolio of local newspapers that is fit for the future, that can carry on employing local journalists and doing great local journalism."